Namibians should fight for money rights
By: MICHAEL GAWESEBCONSUMERS have a right to stable, secure and fair financial services. Since 2006 the Namibia Consumer Trust (NCT) has been advocating for something to be done about bank charges based on findings by various stakeholders, including the private sector which complained that bank charges poses a hindrance. In Namibia basic access and customer care in the financial services sector is lacking. The Bank of Namibia (BoN) used authority effectively although having faced legal limitations.
In fairness to the banking sector, it is the non-banking financial sector that needs a major overhaul and to improve its image. However, the inaction by the Namibia Financial Services Sector Charter Council and its Chairperson by not seemingly playing any role to help proactively enforce the BoN directive on banks made a mockery of the idea of having a charter.
In fact it now seems as a tool aimed at leading consumers to misplace their trust.
Consumers prefer to put their trust in the fiscal and monetary authorities, because of the obligation on them to take public interest/consumer interest into consideration in their policies.
The Governor of the BoN stated at its symposium last year that Government should step in when markets fail and that the public expects Government to step in. This is very true and it’s worth adding that the public also expects authorities to be proactive in regulating the relevant industries, especially the financial services sector.
The recently amended banking legislation is deliberately being misinterpreted by a few industry leaders in the banking sector to seemingly create fear among the business community and prospective investors that businesses are being compelled to operate below profit in efforts to address challenges posed by poverty and inequality. The law simply enables the BoN to have authority to closely monitor the banking industry (transparency) and to steer the economy into the direction of a mixed economy as intended by the constitution in Article 98 (1).
Government is expected to step in when banks fail in order to prevent the economy from a (further) meltdown, as can be seen around the world. The whole world has embarked on financial services sector reform, as well as strengthened consumer protection.
Thus the theme for the World Consumer Rights Day is “Our Money, Our Rights”, and the relevant Namibian authorities acted responsibly by considering public interest. This action has also put Namibia among leaders in the international community and Namibia received congratulatory remarks for this. Therefore the NCT respectfully calls on the National Council and the President to give their consent to these bills, so that it becomes law.
Banks only have themselves to blame as they did very little (if any) and neglected transparency over nearly four years to allay or squash concerns as irrelevant. The BoN is simply compelling them to be transparent, any further action to compel them to reduce charges will be based on findings that they indeed are charging exorbitant fees compared to costs incurred, thus whichever action by the BoN will merely be reflective of the costs they incur to provide the service.
However, consumers remain convinced that charges are exorbitant and will seek an investigation, publishing of findings and corrective action by the BoN as soon as the law is enacted.
Why are banks seemingly fearful to justify their profits and to face competition?
Consumers and the relevant stakeholders are aware that profit-driven organisations also provide vital services and don’t have a problem with that. The only problem is when such businesses operate unchecked, leading to uncompetitive practices as it is seemingly the case in the Namibian economy in various sectors.
It is well known that where there is little (if any) competition in the private sector, high unemployment and poverty rates are consequences. Therefore Namibia cannot afford to be misled that the private sector does not have a role to play or be directed to improve its contribution.
Banks should be reminded that consumers can institute democratically acceptable action against them, but consumers’ regard for sensitivity of the sector to the economy should not be viewed as lack of power or naivety. Banks should become scientific in their argument if they want to be taken seriously. Consumers are equal partners in the economy and this has clearly been recognised by the BoN and the Minister of Finance with these amendments. The Minister even went further and called on consumers to become more active, which in our opinion is a statement that consumer protection (public interest) is equally a priority.
The NCT refrained over the years to request funding from prospective supporters as it first wanted to put legal and internal systems in place, in terms of good governance and not for profit principles as well as independence. It therefore would like to assure consumers and stakeholders that this has been achieved and that work will begin in all earnest, as lack of resources is receiving attention from stakeholders.
Next on the NCT agenda is a consumer protection law, as offensive/misleading advertising is taking place, city officials deliberately relying on outdated, out of touch legislation that specifically target the poor to dispossess them of their housing, thus pushing them deeper into poverty.
Another example why the consumer protection legislation is urgently needed is the mere fact that Government offered to remove value added tax (VAT) from certain food items, but consumers never benefited from these efforts, because some, if not many, business people decided to remove tax, but increased the price.
It is clear that Namibia does not have mechanism to enforce such policies, something that could be done had we such legislation.
Another example is some clothing retailers who are sitting with over 80 per cent default rates of at least over two months, but charges exorbitant interest. Of course people should pay their bills and be responsible, but that does not exonerate the provider from automatically increasing their “credit” since defaulters will eventually be blacklisted. Blacklisting clearly protects businesses, but neglects their responsibility to exercise restraint in availing credit.
Consumer education is also needed to address these issues as provided for by the United Nations as basic consumer rights. Therefore the NCT will keep calling on lawmakers to enact such a law urgently and can even provide its draft.
It is worth mentioning that while Namibia is among leaders in the financial services sector (apart from non-banking sector that needs pro-activity to prevent losses to consumers), it lacks behind in terms of comprehensive consumer protection legislation in the Southern African Development Community (SADC) region.
While South Africa has such legislation, Mauritius also has a Ministry for Consumer Protection, while countries such as Mozambique, Zambia and Malawi are currently jointly involved in an education and advocacy project for a comprehensive consumer protection law.
At a workshop held by the Law Reform Commission last year it appeared the envisaged act will take Namibia’s business relations with the region into account. The NCT will contribute in this regard to bring out Namibia’s need from a grassroots perspective, provide information from regional experiences in terms of benchmarking and pitfall avoidance as well as international experiences stemming from consultations with Consumers International, an organisation where independent not for profit consumer organisations are affiliated. Most such organisations (over 75 per cent) are in the developing world and Namibia only stands to benefit from such solidarity.
• Michael Gaweseb represents the Namibia Consumer Trust.